Dollars for Degrees

By: | Published: November 18, 2015 12:20 AM

Indian higher education would benefit greatly if more private investment were facilitated

If India were to develop itself as a hub for high-quality higher education, then it would not only reduce forex outgo, but could see significant earnings as well. As a front-page analysis in yesterday’s FE points out, in FY15, the $3.6 billion paid by Indian students to US colleges was twice the $1.8 billion that came in as American FDI to India that year (discounting the investment routed by American investors through low-tax jurisdictions like Mauritius). It is an obvious indication of both, the demand for high quality varsity education among Indian students—the number of Indian students enrolling in US institutes increased by just under a third between 2013-14 and 2014-15—and India’s poor ability to offer this in proportion. Of course, there are the likes of the IIMs and the IISc, but these are far from adequate for catering to just the Indian demand, let alone accommodate significant numbers of foreign students.

Despite having 23 institutes among the global top-200, India is nowhere close to being a preferred higher education destination. The government’s spend is woefully inadequate—the amount allocated to higher education in the FY16 budget is nearly $800 million less than what Indian students paid US varsities last year. While it is easy to raise the demand that the government increase its spending, it must be noted that most international students flocking to the US join privately-funded universities, many of which are at the top of the global rankings. So, Indian students and the Indian education sector will both be better served if India were to have a higher education policy to support greater private and foreign investment. In this age of massive open online courses, that India is still waiting to pass a legislation that allows foreign universities to set up campuses here is sad, especially given over 140 million people in the country would reach college going age in the next 15 years, as per an EY study.

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